Simple Moving Average (SMA)

Simple Moving Average (SMA) is a widely used technical analysis tool that calculates the average of a selected range of prices, usually closing prices, over a specified time frame. By smoothing out price fluctuations, it helps traders identify trends and potential turning points. The SMA is particularly useful for comparing current prices to historical averages, providing insights into market momentum. It does not react quickly to short-term movements, making it ideal for identifying longer-term trends and supporting strategic trading decisions.